In Malaysia, all sectors are currently gearing themselves in supporting the initiatives of becoming a developed nation by the year 2020. The most important element in ensuring the success of this mission is to provide critical mass of knowledge workers to champion this cause. As such the Ministry of Higher Education Malaysia (MOHE) has established the National Higher Education Strategic Plan (NHESP), comprising seven thrusts which are very crucial in providing the much needed human capital and eco-system for this agenda. The essence of NHESP is also in line with other initiatives established by the government of Malaysia such as the National Key Results Area (NKRA) and the Government Transformation Plan (GTP). In fact MOHE has developed a systematic working model for the academia to play their role actively in driving the agenda of transforming Malaysia into a developed nation. The workforce required to spearhead the agenda for an innovation-led economy can be categorized into five different groups namely: Discoverers; Innovators; Inventors; Transformers; and Technopreneurs. It is very crucial for MOHE to develop and implement a comprehensive programme for producing a new breed of researchers that can contribute in translating government policies into a reality. This article presents the challenges and success stories in reforming the landscape of Research and Development in Malaysian universities and research institutions. The establishment of NHESP has made it possible for MOHE to systematically establish comprehensive guidelines for the management of research grants, standard for research conduct, instrument to measure research performance, and standardized reporting of research and innovation output. This new approach in the management of research at the ministry level has created positive ramifications for universities, research institutions, research management centres, and research leaders. During the first five-year cycle (2006-2010) of these research initiatives, and now into the second phase (2011-2015), positive results and outcomes have started to emerge. These results include increased in generation of articles on research findings published in reputable journals worldwide. Currently, Malaysia is recognized for achieving the world's fastest growth rate in number of journal publications. In addition, increased in number of postgraduate students, commercialization of R&D products and the establishment of Higher Institutions Centres of Excellence (HiCOE) contribute towards producing a new breed of great researchers in Malaysia. A continuing positive trend indicates that this phenomenal growth will be sustained for the next few years.